Banks Quietly Prepare for Workforce Cuts & CEOs Warn AI Will Weaken Hiring

Additional Resources

• Q1 ManpowerGroup Employment Outlook Survey
• Bank Execs Say AI Will Cut Jobs
• Stagwell’s CEO Survey on AI’s Impact on the Workplace

Transcript

Pete Newsome: 0:00

In today’s headlines, we have the latest thoughts from the largest banks and enterprise CEOs on how AI will impact jobs. But before we get to that, we finally have some positive job market news. Well, positive-ish for the U.S. market. It comes from Manpower Group’s employment outlook survey for Q1 2026. This is one of the longest running and most reliable indicators we have. It shows a net employment outlook of plus 27% for the US. That means more than a quarter of employers expect to increase hiring between January and March. That’s solid, and it’s stronger than the global average. But admittedly, the U.S. outlook is down slightly year over year, which tells us hiring momentum has cooled. But companies aren’t hitting the brakes as much as they’re just easing off the gas. Finance and insurance are expected to see the biggest increase, and mid-sided size employers are driving the hiring, which makes sense. Mid-market companies often grow even when larger enterprises are down.

0:59

So while we’d like to see an increase over last year, it’s always good to see net hiring growth. In the second story today, banks say the quiet part out loud. AI means fewer jobs. The top U.S. banks, including JP Morgan, Wells Fargo, City, PC, and Goldman Sachs, are all saying the same thing. AI is dramatically boosting productivity, and yes, that means fewer roles in the future. JP Morgan says AI has doubled its productivity from 3% to 6% and increased output for operation specialists by 40 to 50%. City reports a 9% increase in coding productivity, all thanks to generative AI. Goldman Sachs openly tied its AI strategy to job reductions and slower hiring. And Wells Fargo CEO Charlie Scharf said there are other places out there where we’re gonna be able to look at and figure out how we’re able to do more with less people. You can’t be more clear than that. These aren’t edge use cases. These are some of the biggest employers of white-collar talent in the world.

2:05

If AI can automate or accelerate a function, that function will need fewer people. That’s just a fact. I see this as further evidence of a massive workforce shift. Banks are a leading indicator because they have huge back office operations and massive data-driven workflows. And those are the exact areas AI is best at optimizing. So if AI is reshaping banking jobs, it’s eventually going to reshape every white-collar industry eventually. Insurance, healthcare, retail, government, all of them. So if this sounds like doom and gloom, I get it. And in a way it is, but more than anything, right now, it’s about being prepared for what’s coming in the near future. Our final story ties everything together, and this is from the Wall Street Journal Stagwell CEO survey. CEOs love AI, but they don’t love what it means for jobs. 100 CEOs with at least 10,000 employees were surveyed last month. Here are some of the numbers. 90% of CEOs believe AI will increase productivity. 87% believe it will strengthen the U.S. economy, but nearly 70% said AI will weaken the U.S. job market.

3:16

When you look at the investment plans, it gets even more direct. 86% of CEOs plan to increase AI spending, making it their top investment priority, while only 44% plan to increase staffing budgets. And nearly half of the CEOs surveyed said young people lack the skills businesses need. This is a perfect storm. AI adoption is accelerating, talent pipelines are perceived to be strained, and companies are reallocating investments from workers to technology. My message with seeing this is the same as it’s been for a while now. And this is to individual professionals, especially young people. Adaptability is everything right now. You have to embrace AI, you have to learn to leverage it. Because those who are going to thrive next year and beyond are the people who can use it to elevate their work and not try to compete with it because you just can’t win. You may not like that this is happening.

4:15

You may not think it should happen. You may want someone to stop it, but it is happening. And companies are going to do everything possible to do more with technology and as a result, need fewer people. It’s just the way it is, and I don’t want anyone to be caught off guard by that. So those are your headlines. But before I sign off for today, here’s a fun fact. In feudal Japan, merchants were considered a lower social class than farmers because farming was seen as a productive activity while merchants simply made money off of the work of others. It’s not fair, but that was reality back then. I wonder what they would have thought of life today. They could not have even imagined what we would be dealing with. And I’m not sure we can imagine what life is going to be like in the not too distant future. But there we are. Thank you for listening today. Please like, subscribe, share with anyone who might be interested. And as always, I look forward to your feedback. Talk to you soon.